Charles Stack will tell you he was one of the first people to take the Internet into e-commerce – and it all came from a casual conversation. “It was an early startup conversation between me and a developer,” he recalls. “We were discussing how the Internet was good for retail. When the Internet first came out, it was static and this developer said CGI could create dynamic response-based [pages].”
With that, Stack created Books.com, the world’s first online bookstore. The company was ultimately acquired by Barnes & Noble in 1996. “That was just from a random conversation after work,” Stack recalls. “That’s kind of fun.”
Charles StackStack, a serial entrepreneur who has founded more than five companies over his career, says great ideas are often born out of casual conversations around the proverbial water cooler. After starting the Cleveland business accelerator Flashstarts in December 2012, Stack knew he wanted to take his entrepreneurial expertise to a higher level – not just give startups the tools they need for success, but also foster creativity and ideas to grow new startups.
He wanted to create the next generation of startup communities. Earlier this year, Stack announced his plans for StartMart, an entrepreneurial hub with plenty of space, people and ideas to foster business growth in Cleveland.
Four tenants – We Can Code IT, Qwickly, <remesh, and Handelabra Games, have already signed on, and additional tenant deals are in the works. StartMart marks a step forward for Cleveland’s entrepreneurial scene because it offers a one-stop-shop for the resources needed to grow a small business in the city.
On Tuesday, September 8th, StartMart will celebrate its official grand opening on the second floor of the Terminal Tower.
Location and room to grow
All of the new StartMart tenants chose the entrepreneurial hub for its downtown location. Qwickly, which allows teachers to easily upload documents and courses through an app, is a fast-growing company, and co-founder John DiGennaro says the environment and location are attractive to potential employees.
“The people we’re hiring and the people we’re talking to actually want to be downtown,” he observes. “It’s a vibrant area. They want to live and work there. The physical location is really attractive to the prospective employees we want to hire.”
Jeremy Handel, founder of Handelabra games, which makes digital board games across multiple platforms, also finds the location ideal. “Downtown Cleveland is really on the upswing right now and we want to be surrounded by that,” he says. “The most vibrant startup communities have proximity in common and I would love to see this really take off in Cleveland as well.”
Stack notes that StartMart is housed in the same space that was once home to the Greater Cleveland Growth Association, now called the Greater Cleveland Partnership. “They were doing the same thing we are,” he says. “Trying to help Cleveland grow.”
The 35,000 square foot StartMart space takes up the entire second floor of the Terminal Tower and features twenty 250-square-foot offices that can accommodate teams of two to 20, called “startpods.” The first four tenants have taken startpods and are in the process of moving in and pay rent on a revolving basis.
“They pay rent per-person, per-month,” Stack explains. “Just-in-time inventory has been all the rage in manufacturing for decades – this is just-in-time office space. It frees up cash and attention for the things that matter most.”
The rent setup attracted both <remesh and Qwickly to StartMart. “When you’re a startup, you really have a tight budget and want to have a flexible budget,” says <remesh co-founder Andrew Konya. “Per month, per head is a model really conducive to a startup.”
Qwickly, which has a staff of three right now and is moving in this week, says the per person model worked well for them, too. “Knowing we have that flexibility, with our employee count going up and down, it’s comfortable for us,” DiGennaro. “It was almost a no-brainer to go there.”
There is also room for 300 hundred coworkers and plenty of creative, common and even recreational space.
The whole setup is intended to stimulate group thinking and spur new ideas. “There’s a synergy to everybody working together,” says Stack. “The geographic proximity piece is a big play here. It’s water fountain serendipity – two people talking and a third idea pops up.”
StartMart’s common areas feature tables with checkerboards, a giant, a group bean bag chair and pouf, and a ping pong table. Furniture is designed to be movable for impromptu group meetings.
“Everything’s on wheels to create conference space that makes sense for your task,” says Stack. “The huge bean bag chair is oversized so lots of people can sit and chat.”
Food-related spaces will also abound. Currently, Stack has created a tea room with 75 different kinds of tea. “It’s a place where people can bond over that common interest of tea and technology,” Stack says, adding that StartMart is open to all types of startups, not just technology-based companies.
Size does matter
Entrepreneurial hubs have to be large enough to house a variety of companies with room to collectively brainstorm. “There are several small co-working spaces in Cleveland, but no big hub designed in this size,” explains Stack. “What I’ve learned from looking at other spaces is that size matters.”
To be successful, Stack says an entrepreneurial hub must be at least 20,000 square feet and house at least 200 people to generate new ideas.
The group environment appeals to Handel, who was previously based out of LaunchHouse. He also hopes the environment will draw a diversity of businesses to StartMart.
“We like to be surrounded by people who are pushing the ball forward and Charles Stack is one of those people,” he says. “My main frustration doing games in Cleveland is that it feels so West Coast or it’s not Midwestern enough for most investors and other business leaders. People like Charles can see the potential in these industries that aren’t traditionally here in Cleveland, and are working to bring them here.”
Stack plans to create a buzz of “constant activity” at StartMart. “We’ll do a lot of events in the space,” he promises. “That’s what the space is ideally suited for. We’ll do startup training, Meetups and hackathons.”
<remesh, which created an app to enable group text conversations, was StartMart’s first tenant. “We were there on day one,” says Konya, adding that the group environment was attractive to them. “Being close to other companies in the startup world that are moving at a startup pace is valuable.”
Konya also sees the StartMart environment as offering a pool of resources that startups so often need. “When you’re a startup, you’re not an expert at everything,” he says. “When we need help with something like visual data we could walk right over [to another company] when we have a question. Being in a space like that has the same advantages of being in an accelerator.”
DiGennaro also enjoys the buzz of activity. "It's putting us with a networked group of people and mentors we wouldn’t be able to connect to if we rented on our own,” he says. “It’s invaluable.”
We Can Code IT, which provides training in computer coding and job placement for minorities and women, announced last month that it would be opening a second location in StartMart. It will continue to offer part-time classes at LaunchHouse, but will also begin offering full-time classes at StartMart.
“We’re growing and expanding,” says We Can Code IT community outreach coordinator Shana Mysko. “We’re opening here for a number of reasons. It’s a great location that’s centrally located and our students can be around other entrepreneurs and other programmers.”
The partnership between We Can Code IT and StartMart will allow the coding students to get some hands-on experience and mentorship from the other tenants, while the tenants will provide a great employment resource for graduates of the program.
“Our students will learn a lot in the space,” says Mysko. “The partnership connects We Can Code IT graduates with startups who need software developers. They really want to work with us as much as we want to work with them.”
Changes in the workplace
The idea for StartMart stems out of what Stack has seen in other big cities around the country – 1776 in Washington, D.C., 1871 in Chicago, We Work in New York, and a handful of entrepreneurial hubs in San Francisco.
The premise of these places, and of StartMart, is that they’re an incubator for today’s startups. “The nature of work has changed somewhat over the last couple of years,” says Stack, adding that many startups are hesitant to commit to a five-year office lease. “They don’t have that kind of predictability. Groups come together for a project, then re-form for a different project, dissolve and then regroup with a different set of co-workers. Co-working spaces pop up because of the change of pace. Office buildings don’t have that kind of adaptability.”
StartMart will welcome all types of young companies, not just tech startups. “We were trying to be very open to what types of teams we wanted,” explains Stack. Flashstarts primarily works with startups based in technology and software. “This is going the other way – we want to be as broad as possible to get as much diversity as possible.”
White boards are everywhere and many walls will be covered with a white board and a black board for brainstorming sessions. Huge, 50-inch telepresence monitors will facilitate meetings with someone in the next room or a company across the country.
Stack has already initiated partnerships with most of the other accelerators and entrepreneurial organizations around Northeast Ohio in an effort to really make StartMart a regional hub. “We’re in communications with all the entrepreneurial organizations,” he says. “We’re not necessarily going to have all of them move in here, but I think at least we will convince them to have an outpost here.”
Those relationships extend to all of the universities Flashstarts has formed partnerships with. Stack is hopeful that CWRU, CSU, Baldwin-Wallace and John Carroll – all of which have entrepreneurship programs – will at least have a virtual, if not physical, presence at the facility.
The grand opening will be held on Tuesday from 4-8pm. Activities include a ribbon cutting, a progressive dinner and drinks. Stack and his team will be soliciting feedback and ideas through a series of activities, and will be invited to participate in StartMart’s $10,000 Kickstarter campaign. Money raised for the campaign will be used for furniture and scholarships.
Tickets to the grand opening are free.